Let’s begin with the premise that being called too conservative by Phil Angelides is like Paris Hilton telling you that you’re spending way too much time studying quantum physics. It’s not a particularly high threshold, coming from such a far end of the other side of the spectrum.
But Angelides may have inadvertently helped Arnold Schwarzenegger make the case for the fiscal responsibility of his bond proposal. After a long weekend of trying to figure out a way to criticize Schwarzenegger’s building plan without offending commuters, parents, residents of flood plains, and other desirable constituencies, the likely Democratic nominee for governor took a break from calling for tax increases on rich people to criticize Arnold for not spending enough on the bond package.
The key point that Angelides made is this: Schwarzenegger’s proposal actually decreases the average annual expenditure on bonds from the rate that has existed for the past five years. Since 2000, California voters have been passing $7.1 billion in new bonds per year. The governor’s bond package calls for an average of $6.8 billion in bonds. What Angelides didn’t say is that less bonding means less debt service to pay off those bonds. Less debt service means less general fund expenditures, which means less pressure to raise taxes. Maybe that’s a point for the governor to make sometime soon.
This gets back to the question of planning ahead. Establishing a clear set of construction priorities for the state over the next ten years is much smarter than the largely improvisational manner in which we currently pass bonds in California every June and November. Angelides complains that the Schwarzenegger proposal ties down the state’s bonding capacity for the next ten years, but that’s a much better alternative than a piecemeal system that rewards whichever political consultant collects petition signatures fast enough. Comprehensive planning and forethought is a conservative value: it shouldn’t take the state treasurer to remind us of that, intentionally or otherwise.
(Actually, Angelides did call for a new tax on wealthy Californians to pay for an even larger bond, but his heart didn’t really seem to be in it. Which is understable, seeing as how he’s already spending that same tax increase on schools, deficit reduction, and preschool programs.)
So the Democratic state treasurer has now reminded us that the bonding can be done without tax increases. Granted, the fact that’s it’s theoretically possible to bond responsibly doesn’t mean that it will necessarily happen that way. The answer to this question won’t be known for some time. But the standards that Tom McClintock and other fiscal conservatives have laid out can be met more easily with a bond package that reduces the current annual outlay.
Gotta run. I’m late for Professor Hilton’s lecture on the time-space continuum.